Nidec shares fall 19.8% after PwC withholds audit opinion on fiscal 2025 results

Auditor refusal and market reaction

PwC Japan Group declined to issue an audit opinion on Nidec's consolidated financial statements and internal control reports for fiscal 2025, which ended in March 2026. The auditor stated that it could not obtain sufficient and appropriate audit evidence to form a basis for an opinion, noting that individuals involved in earlier accounting fraud remained at the motor manufacturer. Market reaction was immediate on 1 October 2026 in Tokyo, where Nidec shares dropped by 19.8% during trading to reach a year-to-date low of 1,888 yen. The company's credit risk also widened in bond markets, with the spread on Nidec notes due in July 2032 reaching 223 basis points, its widest level since early March. Tokyo Stock Exchange rules require companies placed on special alert to demonstrate adequate internal controls within one year or face potential delisting.

Leadership change and listing defense

The audit impasse coincided with another executive reshuffle at company headquarters in Kyoto. Michio Kaida assumed the presidency after his predecessor, Mitsuya Kishida, who was appointed in 2024, resigned on 29 September 2026. Speaking at a press conference on 1 October 2026, Kaida addressed the ongoing management crisis and the regulatory timeline facing the corporation.

“We deeply apologize for another top management change, which came at a time when we are dealing with a series of irregularities.”

Kaida stated that maintaining the Tokyo Stock Exchange listing was his mission, setting a target to resolve all outstanding audit issues before the end of October 2026. Nidec Senior Vice President Masayuki Minai noted that the company is actively removing the influence of personnel tied to past accounting misconduct to satisfy PwC requirements, while denying any link between Kishida's sudden resignation and the auditor's decision.

“We are starting to act so that we can obtain PwC's endorsement.”

Governance failures and quality findings

The current crisis stems from systemic accounting irregularities first uncovered in September 2025, which involved inflated corporate profits and deferred expense bookings. The scandal led company founder Shigenobu Nagamori to resign as representative director in December 2025, followed by his resignation as honorary chairman in February 2026. The Tokyo Stock Exchange designated Nidec as an issue on special alert in October 2025, requiring the firm to submit an internal control report by October 2026 to avoid delisting. Compounding the financial fraud, an independent investigation committee certified 844 instances of improper quality practices in September 2026, covering unauthorized design and manufacturing process modifications across automotive and household appliance components.

Restructuring and portfolio shift

Nidec reported 632.1 billion yen ($4 billion) in total impairment losses for fiscal 2025 on 30 September 2026, driven largely by write-downs in its legacy divisions. Kaida stressed that Nidec will implement structural reforms without exception to stabilize the business and regain stakeholder confidence. The corporate turnaround strategy involves divesting or scaling back low-profit operations in automotive motors and household appliances, where the bulk of impairment losses were registered. Nidec plans to redirect its capital and engineering resources toward artificial intelligence, semiconductor manufacturing equipment, and energy systems to capture rising global demand from data center construction projects.